China-exposed stocks such as Burberry declined after data revealed that China's unemployment grew, while retail sales declined last month. However, the country's economy rebounded at a faster-than-expected pace in the third quarter, with GDP up 3.9% from the year-ago quarter, compared with expectations of 3.4%.

Energy stocks fell 1.8% on the LSE as crude prices declined on low September demand from China

After Friday's resignation of British Prime Minister Liz Truss, the Conservative Party has started the process to select a new leader, with nominations open until today.

Chancellor Rishi Sunak, leader of the house Penny Mordaunt, and former PM Boris Johnson were in the race this week-end. However, Johnson's bid quickly faded. Yesterday, after hours spent on the phone trying to convince Tory MPs to support him, he officially bowed out of the race.

Several media report fueled doubt that he had the 100 signatures of elected representatives required.  Yesterday evening, the BBC counted only 57 public endorsements for Mr. Johnson. Rishi Sunak had 147 public endorsements by the end of the weekend. If Penny Mordaunt also withdraws from the race, Mr. Sunak could be appointed prime minister as early as 2pm.

Meanwhile, the PMI were released this morning in the UK, and they came in below expectations. The Composite PMI dropped to 47.2 from 49.8 in September, while the Manufacturing PMI declined to 45.8 from 48.4 and the Services PMI fell to 47.5 from 50.

 

Things to read today:

Rishi Sunak on course to become Britain’s new prime minister (Financial Times)

China’s economy will not overtake the US until 2060, if ever (Financial Times)

UK Bonds Surge as Investors Pin Hopes on Fiscal Caution (Bloomberg)